By MICHAEL DIERBERG, Chairman of the Board, FB Corporation (First Bank)
Throughout the pandemic, businesses of all sizes were tasked with navigating evolving restrictions, requirements, and guidelines. Specifically, one segment of our business population was forced to face it all with a much greater degree of difficulty: minority businesses. All businesses had challenges to overcome, but minority businesses were hardest hit and, unfortunately, the pandemic hasn’t been their only obstacle.
On average, eight out of 10 black-owned businesses fail within the first 18 months. Even more sobering news is from a study conducted at the University of California at Santa Cruz indicating that a staggering 40% of black-owned businesses are not expected to survive or emerge from the aftermath of the pandemic. At a foundational level, many minority businesses are already lagging the support provided to their non-minority-owned business peers. This is often due to broader social-economic topics already plaguing minority business owners, including the lack of equity built up in minority communities, appropriate business education, mentors, and resources, as well as access to applicable credit solutions and capital.
“Historically, minority communities have suffered from the disinvestment of low property valuations,” commented Stacy Clay, Director of Community Affairs at First Bank. First Bank is committed to assisting these vital businesses so they may continue to provide valuable products, services, and dignified employment in our communities. According to a Small Business Majority Study, of those who applied for a PPP loan, over half said the application process was difficult and a little over 30% received the funding they needed. Realizing the complexities presented by the pandemic, our teams implemented a branch calling initiative that involved contacting businesses within majority-minority areas. Over 70,000 outreach phone calls were made to these underserved areas.
“In 2020, we offered ongoing support and provided nearly 40% of our round one and round two PPP loans in majority-minority areas,” said Clay. “First Bank is committed to working with all of our communities to help turn this tide.”
In addition, First Bank recently launched the Center for Family-Owned Businesses to support family businesses. Joe Ambrose, Executive Director of the Center for Family-Owned Businesses, said, “Our commitment to family-owned businesses is nothing new at First Bank. As a fourth generation family business, we focus on the long view with our clients. The First Bank Center for Family-Owned Businesses is the embodiment of this shared vision and is the foundation for enduring relationships.”
First Bank introduced its first-ever business webinar series for nearly 6,500 registered attendees to help educate and support family businesses throughout the COVID-19 pandemic crisis. Topics ranged from COVID vaccinations in the workplace and critical PPP updates to tax-effective strategies.
A major factor impacting businesses owned by minorities is that many lack access to a strategic financial services partner. Couple this with the vulnerability of moderate savings, low equity, and minimal support and these business owners simply can’t withstand any economic downturns, such as experienced throughout the pandemic.
In support of minority business owners specifically, First Bank invested $250,000 into the Justine Petersen (JP) COVID-19 Response Fund. This fund was designed to support small businesses, primarily minority-owned businesses. Through our partnership with Lendistry, we’ve invested $250,000 to help provide funding for low-to-moderate income businesses as well as $100,000 specifically to minority-owned businesses, primarily in Los Angeles and Orange County, California. The Center for Family-Owned Businesses also partnered with the Gellert Family Business Center to sponsor a minority business leadership program. “We’ve partnered with solid organizations who are already doing great work out in our communities,” expounded Ambrose, “so that we may help provide equal economic opportunities for all.”
If you’re interested in learning more about First Bank’s support of minority-owned businesses, please reach out to Stacy Clay at [email protected]. To learn more about how First Bank can help your business thrive through the generations, contact First Bank.
Small Business Owners of Color Continue to Face Challenges, Rohit Arora, Senior Contributor, Forbes.com, January 29, 2021
40% of Black-Owned Businesses not Expected to Survive Coronavirus, Khristopher J. Brooks, CBS News, June 22, 2020